Chicago Flip is almost complete, 2 options to BRRRR the funds

Chicago, Illinois
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Chicago Flip is almost complete, 2 options to BRRRR the funds

Jacques Ikolo
Rental Property Investor · Charlotte, NC · Member since 2020 · 27 posts · 23 votes

Hello All,

I am investing OOS, finishing a flip in Chicago. I have some ideas on what to do with the money but I'm conflicted with which the best idea. My main goal is cash flow, so by reading this you can tell where I'm leaning towards, but is that the best idea? The flip will net me about $70k, and also have about $50k in LOC that will be available. My two scenarios are: 1) Keep investing in Chicago, where there are plenty of small multifamily properties and I can start the BRRRR strategy, with multi-units. 2) Start investing near where I live, with more single family (not a lot of multifamily in the area) but BRRRR strategy also. There is a big development going on and house prices are fairly cheap and will definitely go up along with rent in the area.

1) Chicago price range will be about $100-125k purchase price and ~ $50-70k rehab (MF)

2) closer to home will be about $80-100K purchase and ~ $20-50k rehab (SF)

So to sum it up, I can do cheaper SF properties and cheaper rehab closer to home with an upward trending area due to the development or I can do small MF properties with a little more expensive rehab and purchase but more units and potentially more cashflow. 

Thanks in advance. 

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Eudith VacioPro Member
Real Estate Agent · Chicago & NWI · Member since 2015 · 860 posts · 521 votes
4y

That is AMAZING! Congratulations on your first profitable flip here in Chicago :) I think if you can continue flipping here in Chicago and creating deals that will cashflow, then sticking to Chicago sounds like a no-brainer to me. BUT, if you want to have more control of your deals, and be closer to your flips then changing your course of action doesn't seem like a bad idea either. 

Let us know what you end of deciding on and I wish you continued success in the future

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  • Eudith VacioPro Member
    Real Estate Agent · Chicago & NWI · Member since 2015 · 860 posts · 521 votes
    4y

    That is AMAZING! Congratulations on your first profitable flip here in Chicago :) I think if you can continue flipping here in Chicago and creating deals that will cashflow, then sticking to Chicago sounds like a no-brainer to me. BUT, if you want to have more control of your deals, and be closer to your flips then changing your course of action doesn't seem like a bad idea either. 

    Let us know what you end of deciding on and I wish you continued success in the future

    2Reply
  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    4y

    @Jacques Ikolo I am a huge fan of the Chicago market, and the fact that you have done a successful flip is amazing. For me, this choice would be easy. I would stay closer to home as long as the numbers work well. I believe real estate needs to be hands on... the hands don't need to be yours, but they need to be someone you trust. I love being close to the properties I invest in because it helps me stay in control of the assets, which ultimately leads to much higher returns. 

    1Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    4y
    Quote from @Jacques Ikolo:

    Hello All,

    I am investing OOS, finishing a flip in Chicago. I have some ideas on what to do with the money but I'm conflicted with which the best idea. My main goal is cash flow, so by reading this you can tell where I'm leaning towards, but is that the best idea? The flip will net me about $70k, and also have about $50k in LOC that will be available. My two scenarios are: 1) Keep investing in Chicago, where there are plenty of small multifamily properties and I can start the BRRRR strategy, with multi-units. 2) Start investing near where I live, with more single family (not a lot of multifamily in the area) but BRRRR strategy also. There is a big development going on and house prices are fairly cheap and will definitely go up along with rent in the area.

    1) Chicago price range will be about $100-125k purchase price and ~ $50-70k rehab (MF)

    2) closer to home will be about $80-100K purchase and ~ $20-50k rehab (SF)

    So to sum it up, I can do cheaper SF properties and cheaper rehab closer to home with an upward trending area due to the development or I can do small MF properties with a little more expensive rehab and purchase but more units and potentially more cashflow. 

    Thanks in advance. 


    My opinion- Establish a few benchmarks such as minimum project ROI for your company and scout both markets simultaneously for opportunities that will meet those benchmarks. No need to limit yourself to one market.

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    2Reply
  • Jacques Ikolo
    OP
    Rental Property Investor · Charlotte, NC · Member since 2020 · 27 posts · 23 votes
    4y
    Quote from @John Warren:

    @Jacques Ikolo I am a huge fan of the Chicago market, and the fact that you have done a successful flip is amazing. For me, this choice would be easy. I would stay closer to home as long as the numbers work well. I believe real estate needs to be hands on... the hands don't need to be yours, but they need to be someone you trust. I love being close to the properties I invest in because it helps me stay in control of the assets, which ultimately leads to much higher returns. 


     I totally agree, having done a long distance flip, I would like something closer to home where I can have more control. Though I am not imposed to long distance investing, I love the idea of having long term buy and hold properties to be closer to home. 

    0Reply
  • Jacques Ikolo
    OP
    Rental Property Investor · Charlotte, NC · Member since 2020 · 27 posts · 23 votes
    4y
    Quote from @Crystal Smith:
    Quote from @Jacques Ikolo:

    Hello All,

    I am investing OOS, finishing a flip in Chicago. I have some ideas on what to do with the money but I'm conflicted with which the best idea. My main goal is cash flow, so by reading this you can tell where I'm leaning towards, but is that the best idea? The flip will net me about $70k, and also have about $50k in LOC that will be available. My two scenarios are: 1) Keep investing in Chicago, where there are plenty of small multifamily properties and I can start the BRRRR strategy, with multi-units. 2) Start investing near where I live, with more single family (not a lot of multifamily in the area) but BRRRR strategy also. There is a big development going on and house prices are fairly cheap and will definitely go up along with rent in the area.

    1) Chicago price range will be about $100-125k purchase price and ~ $50-70k rehab (MF)

    2) closer to home will be about $80-100K purchase and ~ $20-50k rehab (SF)

    So to sum it up, I can do cheaper SF properties and cheaper rehab closer to home with an upward trending area due to the development or I can do small MF properties with a little more expensive rehab and purchase but more units and potentially more cashflow. 

    Thanks in advance. 


    My opinion- Establish a few benchmarks such as minimum project ROI for your company and scout both markets simultaneously for opportunities that will meet those benchmarks. No need to limit yourself to one market.


     Thank you for your response. It's a great point that I should not limit myself to one market. Though for flips, I do not mind buying OOS. For buy and hold, I would like to be established in one market first before I move on, just so I can keep business coming to my GC and build a great foundation for my business.

    0Reply
  • Jonathan KlemmBusiness Member
    Moderator
    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    4y

    @Jacques Ikolo this is awesome stuff and you have an awesome decision on your hands.  

    I think you have to do what's right for you.  My opinion would be to keep leveling up if that's more of your end goal.  If you are content with the single families since they are close to home, more straightforward, and provide the needed cash flow for your family then do that.

    To sum it up.....I don't think either choice will be bad.   Stealing a page from my coach Jason Drees, which scenario feels lighter & easier?  That's probably the better choice.

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